The search engine giant's Autocomplete service linked a businessman with the words "fraud" and "fraudster"

A Milan judge has found Google Italy guilty of defamation because of the way its search engine linked the name of an Italian businessman to the word "fraud" and has ordered the company to modify the operation of its Autocomplete service.

The ruling by Judge Roberto Bichi was published March 24 and rejects a Google appeal against an earlier Milan court ruling that upheld the complaint of a businessman, identified in press reports Tuesday only as "AB." Bichi also ordered the company to pay a total of €3,800 (US $5,550) in costs and damages.

AB, an entrepreneur in the financial services sector who uses the Internet to promote his business, complained that Google's Suggest search/Autocomplete function linked his name to the words "fraud" and "fraudster" (truffa and truffatore).

The connection was particularly unfortunate since he was a trader and clients might naturally search for his name in connection with the word "trading." AB complained that the word "fraud" came up as a suggestion after his name even without the user beginning to type a further term and that Google failed to take corrective action when the problem was drawn to its attention by his lawyer.

Bichi and a panel of two other judges ruled that the association of the plaintiff's name with the word "fraud" was liable to lead users "to doubt the moral integrity of the individual" and "to suspect him of illicit conduct."

The fact that the links did not actually lead to defamatory information about AB was not a valid excuse for Google's conduct, the judges said. Many users would not bother to click on the links and would come away with a negative impression of AB, while there was no evidence to support Google's contention that Internet users were capable of discriminating intelligently about the information they found online, the judges said.

In its appeal against the earlier ruling, Google argued that it provided a neutral hosting service and that the selection of information was carried out automatically by its proprietary software, with no active human intervention.

The company also argued that if it intervened to prevent its users from having access to information posted by third parties it could open itself to complaints and requests for compensation.

There was no question of the ruling creating a precedent, Piana said. "All cases are different."

"Google argued that it could not be held liable because it is a hosting provider, but we showed that this is content produced by them, although through automated means. Therefore in this case the search engine cannot avail itself of the safe harbor provision of the [European Union's] e-commerce directive," Piana wrote.

The search engine had simply registered the fact that a number of users had combined AB's name with the words "fraud" and "fraudster," Scorza wrote. "The suggestions merely recounted the history of other people's searches and made them available to new users," he said.

The Milan ruling follows similar controversies in France, Sweden and Brazil, and comes just over a year after three Google executives were handed suspended six-month prison sentences in Milan for allowing a video showing the bullying of a handicapped boy to be posted on Google Video.

It also has elements in common with a ruling by a Rome court last month that ordered Yahoo to remove links from its search engine that led to pirated copies of an Iranian film.

Google was disappointed by the court's decision because it failed to take account of the fact that Autocomplete was based on the search behaviors of prior users, the company said in a written statement. "For the moment we are considering all our options," it said.